Submitted by Sestini & Co
| on Mon, 11/10/2014 - 18:08 | In Uncategorized
Direct Recovery of Debt powers announced in the Budget 2014 mean that HMRC could recover funds directly from bank accounts, building society accounts and ISAs of debtors who owe £1,000 or more in tax and tax credit debts without the need for a court order, where they believe amounts are due.
Under the proposals, if documentation provided by the deposit takers show that there is a minimum of £5,000 available to the debtor and they are assessed as having sufficient funds to meet their day-to-day expenses, HMRC will insruct the deposit taker to hold the funds. They will then write to the debtor giving 14 days to make the payment, to object or to provide eveidence of hardship. If no payment or objection is made within 14 days, the deposit taker will be instructed to transfer the funds owing to HMRC.
This consultation document has raised much discussion amongst professional bodies with one of the fundamental issues being that these proposals circumvent the courts. Watch this space for further updates.
Since the article above was written, George Osborne has watered down the above controversial plans. The Chancellor has agreed to impose a number of safeguards which the Treasury said would ensure that the measures “only catch those who are playing the system”. As well as face-to-face meetings, debtors will now be given the right to appeal to HMRC and, if that is not successful, appeal through the county courts. In addition, HMRC will also set up a specialist unit to deal with cases involving vulnerable members of society and will set up a helpline.